Specialist Patrick King, second from right, and others watch President Barack Obama's remarks on a television monitor the floor of the New York Stock Exchange Tuesday, Aug. 2, 2011. The stock market stumbled again Tuesday and is on pace for its longest losing streak in two years.(AP Photo/Richard Drew) less

Specialist Patrick King, second from right, and others watch President Barack Obama's remarks on a television monitor the floor of the New York Stock Exchange Tuesday, Aug. 2, 2011. The stock market stumbled ... more

Photo: Richard Drew

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Specialist Patrick King, second from right, and others watch President Barack Obama's remarks on a television monitor the floor of the New York Stock Exchange Tuesday, Aug. 2, 2011. The stock market stumbled again Tuesday and is on pace for its longest losing streak in two years.(AP Photo/Richard Drew) less

Specialist Patrick King, second from right, and others watch President Barack Obama's remarks on a television monitor the floor of the New York Stock Exchange Tuesday, Aug. 2, 2011. The stock market stumbled ... more

Photo: Richard Drew

Image 3 of 4

In this photo taken July 7, 2011, a "Price Reduced" sign is displayed on a house in Palo Alto, Calif. Americans cut their spending in June for the first time in nearly two years after seeing their incomes grow by the smallest amount in nine months. The latest data offered a troubling sign for an economy that is adding few jobs and barely growing. (AP Photo/Paul Sakuma) less

In this photo taken July 7, 2011, a "Price Reduced" sign is displayed on a house in Palo Alto, Calif. Americans cut their spending in June for the first time in nearly two years after seeing their incomes grow ... more

Photo: Paul Sakuma

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Consumers stop spending

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WASHINGTON -- The stock market is on its longest losing streak since the financial meltdown of 2008, confronted almost every day by fresh evidence that the economy is in serious trouble again.

Investors sold all day after a report that the economy, which is barely growing and straining to produce jobs, is getting almost no help from consumer spending. Americans saved more in June and spent less for the first time in almost two years.

The big declines in the stock market came despite the formal end of weeks of uncertainty over whether Congress would raise the federal government's borrowing limit.

President Barack Obama signed into a law a bill that raises the debt ceiling and promises more than $2 trillion in cuts to government spending over the next decade. The bill was passed by the House on Monday and by the Senate earlier Tuesday, 74-26.

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"The market is starting to wonder where the growth is going to come from," said Nick Kalivas, a vice president of financial research at MF Global.

The spending decline in June came after a report last week that the economy grew at an annual rate of less than 1 percent in the first six months of the year -- the slowest since the end of the Great Recession in June 2009.

Tuesday's report showed that by June, Americans had grown more cautious.

"With gasoline prices high, incomes not growing and the craziness in Washington creating uncertainty, is it any surprise that people stopped spending?" said Joel Naroff, chief economist at Naroff Economic Advisors.

The government said consumer spending dropped 0.2 percent in June. It was the first decline since September 2009. Consumer spending fuels about 70 percent of economic growth.

Part of the drop was because food and energy prices have declined a little after sharp increases earlier this year. Gasoline, for example, costs about $3.70 a gallon after the national average flirted with $4 earlier this year.

But Americans also cut back on major goods, such as cars, furniture and appliances.

Incomes, which include Social Security checks and other government benefit payments, rose just 0.1 percent. That was the smallest gain since September. Wages and salaries fell.

People socked away more of their payments, perhaps because of increasing worries about the economy and job security. The personal savings rate rose to 5.4 percent of after-tax incomes, the highest since August 2010.

"We believe the economy will continue to struggle for some time, especially since there has been a move by the federal government toward fiscal consolidation," said Paul Dales, senior U.S. economist at Capital Economics.